Over the years, we have been able to help clients grow their businesses with reduced legal risk, predominantly by ensuring that binding arrangements with others are properly documented (such as arrangements with partners, franchisees, employees and contractors), and that before being signed, written documents provided to our clients by third parties mirror the verbal agreement reached.
Checking the small print before you sign
Whether you are setting up a website, providing goods and services, buying a franchise, taking a licence of someone else’s brand, or taking a lease of property, you are entering into legal relationships with others.
It’s amazing how many times clients verbally agree a bargaining point only to find that it does not appear in the written document. In a recent example, we acted for a personal trainer who had negotiated an arrangement with a large hotel whereby his business would provide training services to hotel guests in the hotel gym. During the negotiations he mentioned that he would need to use the facilities for his own clients who were not staying at the hotel. In the written agreement proposed by the hotel, nothing was stated about the fitness trainer’s right to use the facilities for training his own clients which, if he had signed without appropriate amendments, could have resulted in the venture being unviable.
We also often see agreements which automatically renew, and which can only be terminated by provision of long periods of notice, for example up to a year.
Failure to notice these clauses can mean personal trainers are locked into payment of fees or charges to a third party long after the arrangement has come to an end in practice.
Having your own small print
Before providing personal training services, you should have a lawyer draw up some simple terms and conditions governing the basis upon which you provide your services. Alternatively you can draw up your own conditions, but it is always wise to have them checked by a lawyer to ensure that all legally important points are covered.
Your clients should be given the opportunity to read the terms and conditions before they sign, receive your services, or make a payment, to ensure that the terms are legally recognised as part of the agreement, or contract, between you. Some key terms to include in personal training terms and conditions include:
- the fees you charge including cancellation fees
- what services will be offered and by who (can you provide those services through a third party personal trainer or are they to be delivered personally by you?)
- times and details of what sessions are booked, or how the sessions are to be booked
- whether a customer is required to undertake any health screening and obtain a doctor’s “medical clearance” letter before attending a training session
- how and when payment is to be made by the client
- what is to happen if payment is not made as required – can you terminate the agreement early?
- what is to happen regarding charges if a client is unable to attend and gives you notice of that?
- are clients entitled to cancel or terminate the contract early?
- how long is the trainer required to wait for a late client before leaving the booked premises?
- what liability does the trainer seek to exclude e.g. liability for death or personal injury sustained by a customer as a result of attending a training session (note ‘Risk and liability’ section below).
The terms of your contract would need to comply with the requirements of applicable laws, for example the Australian Consumer Law (ACL) incorporating the non-excludable consumer guarantees and regulation of unfair contract terms. Specific State-based regulation also applies in respect of recreational services, particularly when you are contracting on a fixed term or ongoing basis or if you accept pre-payment.
Risk and liability when things go wrong
Due to the nature of recreational services, it is possible that a client may occasionally be injured. When this happens there is always the risk that your client could make a claim against you.
The ACL contains certain consumer guarantees including that you must provide services with care and skill. Although it is not possible to exclude these guarantees altogether, the ACL permits a provider of recreational services some scope to limit their liability resulting from a failure to meet a consumer guarantee. In particular, properly worded limitation clauses can provide you with some protection against claims arising from death or personal injury. However, it is essential that these limitations do not overstep the boundaries permitted by the ACL or they may invalidate parts of your terms.
In Victoria and South Australia there are separate ACL exclusion forms that are prescribed for these purposes. In addition, if you are in New South Wales or Western Australia, you may wish to consider the use of a Risk Warning form, which may provide you with some protection against negligence claims.
As it is not always possible to limit all potential exposures, we recommend you also consider taking out appropriate insurances. We also regularly advise clients that conducting business through a company may be advantageous where personal liability is a potential concern.
Franchising and understanding the small print before you sign
Some legal agreements, such as the purchase of a franchise, are very significant documents with far reaching consequences.
Because like any business, a franchise can fail, it is important to obtain legal advice before entering into such an agreement to ensure that the franchisor has disclosed to you all of the matters which must be disclosed under the Franchising Code of Conduct (such as any lease you will be required to enter into, any confidentiality requirements, or requirements for capital expenditure), and that you fully understand the implications of the agreements (for example, any obligation to sell the business back to the franchisor at the end of the franchise period and how the price will be set).
You also need to understand any restrictions which are being placed upon you under written agreements (even agreements to act as a contractor for another), such as a restriction on you operating as a personal trainer within a certain area for a certain period of time after termination of the contract.
Contracts will sometimes dictate how a dispute is to be resolved e.g. by a meeting of the parties. But where they do not, mediation can be an extremely effective way of bringing a dispute to an end with significantly lower legal and other costs than a dispute which is litigated through the Courts.
Protecting and exploiting your brand
Those who have built a successful system (for example a training or marketing system) and brand, might consider licencing or franchising that brand and system to others as a further development of their business.
If you are considering offering a licence or a franchise, it is important that you engage your lawyer early in the process so that the business and financial model is developed in compliance with the overarching legislation such as the Franchising Code of Conduct, and that the necessary legal agreements such as early confidentiality agreements and licence agreements as well as the franchising agreement itself, are drafted consistently and truly mirror the business model.
At a smaller scale, you may wish to consider whether registering your name and brand as trademarks might help protect the goodwill and market share you have developed.
Meridian Lawyers acts for a diverse range of clients including personal and fitness trainers. We are also pleased to work with Australia’s peak fitness industry body, Fitness Australia.
Meridian Lawyers has extensive experience in advising health practitioners and the fitness industry and is well placed to provide you with cost-effective legal services, tailored to your individual needs. If you would like to discuss anything raised in this article, or are considering engaging a lawyer, please contact Georgina Odell and we will be pleased to talk it through with you.